SELF-REFERRALS: Thomas’ Bill to Repeal Never-Enforced Ban
House Ways and Means health subcommittee Chair Rep. Bill Thomas (R-CA) unveiled legislation yesterday designed to "repeal a six- year-old ban on physicians referring Medicare patients to laboratories or other facilities with which a given physician has a compensation arrangement," Congress Daily/A.M. reports. The ban, which is part of two laws sponsored by Rep. Pete Stark (D-CA) referred to as "Stark I and Stark II," has never been enforced, as HCFA has had difficulty drafting final regulations, citing problems in sorting out "exceptions to ensure beneficiaries have access to needed services" (Rovner, 7/29). The bill would change the self-referral law so that it only applies to ownership interests -- not compensation arrangements. Thomas said, "This bill will give doctors more power in determining where their Medicare patients can get the care they need while serving as an effective tool to fight fraud and abuse in the Medicare system." Thomas noted that enforcement of the Stark laws is "virtually impossible," as nearly anything can be deemed "compensation," even free parking for doctors. Thomas' bill bars doctors from referring patients to labs they own, but compensates them for referring patients to facilities they do not own. Additionally, the bill requires immediate enactment, regardless of proposed implementation guidelines (release, 7/28). Stark, however, condemned Thomas' bill as promoting a return "to the days of massive patient abuse by unscrupulous doctors," noting, "It will cost Medicare hundreds of millions of dollars in increased testing, and it will destroy trust between patients and doctors." He cited an HHS Inspector General report that found that patients of physicians who invested in labs received 45% more clinical lab services. Stark introduced legislation yesterday that includes a "fair market value exception ... for providers who have compensation relationships with" ancillary services (release, 7/28).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.